iPhone Sales Numbers Indicate Solid Start

The rate at which Apple iPhones flew off the shelves this weekend came as a surprise to some analysts. Most were confident that, barring any supply shortage, Apple could continue its sales momentum in the near future. After that, however, Apple must sell to the masses, not the faithful.

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The rate at which Apple iPhones flew off the shelves this weekend came as a surprise to some analysts. But most were confident that, barring any supply shortage, Apple could continue its sales momentum in the near future.

Gene Munster, a senior research analyst with Piper Jaffray, estimated that Apple sold approximately 500,000 iPhones in the past three days. Earlier this year, he predicted sales in the 200,000 range.

Apple had an "extremely solid weekend," added Hugues de la Vergne, principal analyst for mobile terminals research at Gartner. "Apple's challenge will come after the first 90 days when the Apple faithful have adopted this product. By then Apple will need to expand their market to new users."

For Apple, the iPhone launch is the latest facet of an image the company has tried to portray, an interesting combination of mass-market appeal and boutique styling and pricing. The iPhone's launch was undoubtedly a hit, following a successful iPod nano launch as well as a much more subdued introduction of the Apple TV.

That market has thus far included those drawn to prestige products, de la Vergne said. The iPhone has "become the must-have product" and appeals to "a more trendy or fashion-conscious consumer" as well as the tech-savvy, he said.

Though people lined up for days outside Apple stores, "this isn't the similar dynamic to what we've seen in the holiday season with certain, hot video game consoles," said Ross Rubin, director of industry analysis for the NPD Group. "There isn't a gift dynamic" that could drive sales.

"There is probably some group that is waiting to see the experience of the early adopters," Rubin said. "At $600, it's not a phone for everyone. There are those on the cutting edge who have legitimate issues with some of the limitations."

Nonetheless, Apple "has a good opportunity to address some of those deficiencies and increase the value of the device over time," Rubin said.

Piper Jaffray's Munster and his associates interviewed 253 shoppers at the New York, San Francisco and Minneapolis Apple stores on Friday night and found that 95 percent were purchasing the 8-Gbyte iPhone instead of the 4GB device. Approximately 75 percent of purchasers were Mac users, he found.

Munster was surprised to discover that 68 percent said they would continue to use their iPods in conjunction with the iPhone despite the fact that the iPhone has a built-in iPod. Only 3 percent of respondents did not own an iPod.

On the provider front, 48 percent of those questioned were existing AT&T customers, the only wireless provider to provide service for the iPhone.

An AT&T spokesman confirmed that "nearly all of our 1,800 retail stores have sold out." He declined to provide specific numbers or comment on when new devices might be delivered to stores, citing "competitive reason."

The majority of iPhone purchasers, or 35 percent, were switching from Motorola devices, Munster said. Nokia and Treo users accounted for 13 percent of those surveyed, while the remainder used Samsung, LG or BlackBerry devices, he said.

As expected, many iPhones have surfaced on eBay. "The risk is that you're betting on the stores being out of stock to command a premium," NPD's Rubin said.

//Related Articles

As of Monday afternoon, eBay had approximately 3,600 listings for 8-GB iPhones and 842 listings for the 4-GB device. Winning bidders for many of the 8-GB phones, which retail for $599, were topping $700.
The iPhone is available for purchase on the Apple Web site, though delivery could take between two for four weeks, according to Apple.

Chloe Albanesius has been with PCMag.com since April 2007, most recently as Executive Editor for News and Features. Prior to that, she worked for a year covering financial IT on Wall Street for Incisive Media. From 2002 to 2005, Chloe covered technology policy for The National Journal's Technology Daily in Washington, DC. She has held internships at NBC's Meet the Press, washingtonpost.com, the Tate Gallery press office in London, Roll Call, and Congressional Quarterly. She graduated with a bachelor's degree in journalism from American University...
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